A bull market is always related to the right investor confidence, motivation, and other factors that allure him to spend more on the stock. Investing in the stock market is considered to be a challenging task. Be a person an average investor or a professional open; it is never easy to have a proper grip about the market One of the confusing terms for all the investor in the stock market is the concept of short-selling.
Though many people understand the entire concept of short-selling, many people become confused when you discuss the short-selling of the bullish market. Bull Market is (Bull Market คือ, which is the term in Thai) considered to be highly beneficial when it comes to making a substantial amount of money from the short selling. Rather the short-selling mechanism is considered to be the cornerstone strategy for this type of market.
There are several rules which are followed while selling short in the bull market, which probably helps from getting clobbered.
Firstly, one must sell only the heavily capitalized stocks, which provide very low short interest in the current period. These stocks receive a minimum hit from the short squeeze, which is considered to be a sharp rally. The short seller rushes to cover the positions when there are limited shares available. So, at times one does not get stock to purchase when the company does not have heavy capitalization, and people have to rush to cover their position.
It is always recommended to cover one’s position by the weekend. It is quite obvious that during a regular bullish market, any favorable news might filter out after the weekends. This might cause the stock price to jump considerably by the beginning of the next trading week. SO, rather than waiting for such news and then covering up the position, it is always better to purchase the stocks before the weekend.
Note: One should not sell all-time high short stocks or the ones who have made new highs. This time is considered to be very tempting as it is even logical to sell the stock, which has risen considerably and might take some period to settle. However, one must keep this in mind that in the bullish market, stock even continues to rise more than the past time highest value. So, therefore it is always beneficial to wait for some time until one could see some signs of weakness.